ADAP: Clear as Mud, Part Deux

My Generation

Part Two of a series with former Illinois FSA head Bill Graff, as we dissect NCGA's proposed farm program.

Published on: September 22, 2011
So earlier this week, Bill Graff – Illinois farmer, blogger and former head of Illinois FSA – offered his thoughts on NCGA's proposed farm program, the Agricultural Disaster Assistance Program, or ADAP. Yesterday, he contrasted ADAP and ACRE. Today, further thoughts on the whole shebang. Take it away, Bill…

Bill:
Crop Insurance is very good for risk management as long as your spring price is OK. If we have a huge drop in commodity prices then crop insurance is not so good for that year.

This is a very good program for the central part of the Corn Belt on very productive land. This is not going to be well received where farmers have either boom or bust years. Shallow revenue losses will be covered but with the 10% limit, risky production areas that depend on disaster programs will not go for this as a replacement for SURE. An example is river bottom farmers or farmers in many areas of the Great Plains. They cannot buy affordable crop insurance that covers very much risk. They buy catastrophic insurance and then depend on disaster programs in the years they do not raise a crop. When they have a good year though, they have a very good year.

The Washington “bean counters” will not like the use of the October price to set the revenue. They will say very few farmers sell their entire crop in October, so why do we need to cover a “phantom” loss?

Direct payments down south are king. Now the cotton guys are “tweaking” the current program to fit WTO rules and get rid of the Brazilian problem. You have to remember, down south they view it as “us versus them” and they are the "us" and everybody else in agriculture is the "them," and they have always had a better program for their crops than the “them” have had.

Me:
would you sign up for ADAP?
Bill: Depends on what all the other rules they tie to this. How good is crop insurance going to be? What does the National Cotton Council come up with? How much does this proposal change between now and whenever it gets passed and signed into law? How bad can USDA/FSA lawyers screw up the rules to this program? Is cross compliance involved?

Me:
Further thoughts?
Bill: I commend the Corn Growers for getting out front and doing something. I just believe that the “super committee” is going to come in with a high number for agriculture to meet with cuts. I also believe whoever gets elected in 2012 will cut agriculture again in 2013. Democrats know that most rural farm program participant voters do not vote for them and the Democrats will have other priorities. A Republican will have to show the Tea Party how serious he/she is about the deficit.

With the cuts I anticipate coming, I believe it will very hard to do a “farm program,” an environmental program, a dairy program, etc., etc., etc. This is just the beginning. The end could come quick if mandated cuts are large, or it could play out for awhile. My other big fear is actually getting something passed in the House, as both liberals and conservatives do not have much good to say about the “farm program.”

(Like to hear this conversation as a podcast? Click here.)